Jun
27
“Goods inflation” was the big story of 2020. The pandemic happened, we tried to reopen the economy but factories weren’t open. Lumber prices soared, container ships backed up at West Coast ports, 15-week backlog to get new home furniture. Not enough goods – prices soared. “Service inflation” was the big...
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Jun
21
About 40% of the Consumer Price Index (CPI) is comprised of shelter costs. Shelter comes in various forms but apartment supply/demand drivers are a big underlying factor in the direction of CPI. CPI gets a lot of attention from the Fed, the market, and anyone trading 2y UST notes. It’s...
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Jun
13
All-important CPI inflation data out this morning, and while the market’s reaction has been favorable since 8:30am EST there’s lots to evaluate here. Has the headline CPI inflation number fallen enough to put the Fed in “pause mode” for the summer? The trend of inflation is declining but inflation itself...
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Jun
12
Much has been written over the last few months about the narrowness of the market (poor breadth). The S&P 500 is up 12%+ year to date but there have been relatively few outperformers; a handful of ‘AI’ related stocks have soared while the remaining stocks in the S&P are flat...
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Jun
08
The S&P 500 is up 20% from the October lows and predictably more and more investors are bullish on continued gains. Price leads sentiment. The latest AAII survey published yesterday shows the largest number of bulls in a year after a massive 15% jump to 44% from just the previous...
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Jun
07
With the market now having cleared the all-important 4200 on SP500, the question now becomes “what’s next?”. The answer is “breadth”. As we have noted prior, almost all of the market return in 2023 for the equity markets has come at the hands of the mega cap tech sector. In...
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Jun
05
The CPI Index captures trends in consumer prices, the stuff that you and I all consume each day in various ways. The CPI Index is roughly comprised of 40% housing costs, 20% for food costs, and 40% a catch-all of other expenses. One big driver of CPI inflation in 2022...
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Jun
02
As expected, our beloved elected officials waited until the very last moment and then cut a deal that does little for the budget but does avert a financial calamity. I can’t tell you all how happy I am not to be discussing the debt ceiling issue until late 2024. It...
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Jun
02
It seems like forever since we started talking about recession. The yield spread between 10-year and 2-year treasuries (a.k.a. the yield curve), one of the earliest indicators of recession, first inverted 14 months ago. In today’s world of fast-paced financials markets and news cycles, 14 months is forever. So, it...
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Jun
01
This note is going to go into some of the more granular, monthly technical work that we do, but with technicals being an important ‘building block’ in our investment process we thought it was important to share. And it’s all about monthly candles. Candles are a charting method to denote...
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